3 Stocks Rising on Unusual Volume - views

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

Lululemon Athletica (LULU), together with its subsidiaries, designs, manufactures and distributes athletic apparel and accessories for women, men and female youth. This stock closed up 2.7% to $40.11 in Friday's trading session.

Friday's Volume: 7.14 million

Three-Month Average Volume: 3.34 million

Volume % Change: 195%

From a technical perspective, LULU spiked notably higher here with strong upside volume flows. This spike to the upside on Friday is quickly pushing shares of LULU within range of triggering a big breakout trade. That trade will hit if LULU manages to take out its 50-day moving average of $40.28 to some more near-term overhead resistance at $40.49 with high volume.

Traders should now look for long-biased trades in LULU as long as it's trending above Friday's intraday low of $39.45 or above more near-term support at $38 and then once it sustains a move or close above those breakout levels with volume that hits near or above 3.34 million shares. If that breakout materializes soon, then LULU will set up to re-test or possibly take out its next major overhead resistance levels at $43.71 to $44, or even $46 to $48.

Ubiquiti Networks (UBNT), together with its subsidiaries, offers a portfolio of networking products and solutions for service providers and enterprises. This stock closed up 7% at $42.09 in Friday's trading session.

Friday's Volume: 3.01 million

Three-Month Average Volume: 1.37 million

Volume % Change: 173%

From a technical perspective, UBNT gapped up sharply higher here back above its 50-day moving average of $41.05 with strong upside volume flows. This move also briefly pushed shares of UBNT back above its 200-day moving average of $42.11, before it closed just below that level at $42.09. Market players should now look for a continuation move to the upside in the short-term if UBNT manages to clear Friday's intraday high of $42.98 with strong upside volume.

Traders should now look for long-biased trades in UBNT as long as it's trending above Friday's intraday low of $41.08 and then once it sustains a move or close above $42.98 with volume that this near or above 1.37 million shares. If that move gets started soon, then UBNT will set up to re-test or possibly take out its next major overhead resistance levels at $46 to $47, or even $48.

Bonanza Creek Energy (BCEI), together with its subsidiaries, operates as an independent energy company in the U.S. This stock closed up 1% at $57.78 in Friday's trading session.

Friday's Volume: 2.20 million

Three-Month Average Volume: 988,475

Volume % Change: 165%

From a technical perspective, BCEI spiked modestly higher here right above some near-term support at $53.75 with above-average volume. This move briefly pushed shares of BCEI back above its 50-day moving average of $58.18, after the stock tagged an intraday high of $58.94. Shares of BCEI closed just below that level at $57.78. This spike higher on Friday is starting to push shares of BCEI within range of triggering a major breakout trade. That trade will hit if BCEI manages to take out some key near-term overhead resistance levels at $60 to $60.91 and then once it clears $62.89 to its 52-week high at $62.94 with high volume.

Traders should now look for long-biased trades in BCEI as long as it's trending above $56 or above $55 and then once it sustains a move or close above those breakout levels with volume that hits near or above 988,475 shares. If that breakout triggers soon, then BCEI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that target are $65 to $70.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.